Can 'useless' expenditure be justified

As a productivity professional, I am used to counting every penny/cent spent and justifying the expenditure by the benefits it brings - its (perhaps tiny) contribution to the aims of the organisation.

Sometimes, however, firms decide to spend money on things which have no direct utility - corporate art, charitable giving, etc.  Can such expenditure be justified?  ... in productivity terms.

Organisations are often large, complex, beasts - with many divisions and components. What makes them successful is their ability to co-ordinate all the parts and work together as a complete entity, working to common goals - and the organisational mission.  This ability often depends on leadership - and the way this creates a sense of shared values ... and shared mission.

Often, non-utility expenditure is concerned with expressions of values.  It shows stakeholders the things the company regards as important. As such it helps create cohesion around the message and the mission.

As long as the amount of money spend on such things is not 'out of proportion' to utilitarian expenditure, and, as long as it is not expenditure for a privileged few - artwork in the executive penthouse, for example - it can make a positive contribution.

Today's Mantra is ....

Consultants usually specialise in .... productivity, quality, organisational development, innovation, or some other 'improvement' topic.

This suggests that the business world is full of tools and techniques that must be selected carefully according to the kind of situation - and kind of problem - being considered.

However my experience is that most of the tools and techniques - whether quality tools, productivity tools or whatever - are simply means of exploring the situation - and uncovering hidden 'truths'.

Any consultant worth his/her salt should be capable of addressing a quality problem or an innovation project - using whatever tools they feel most comfortable with.  We pretend to be knowledgeable and 'clever' - and of course we are ... but often our major asset is having time and having an external, disinterested viewpoint.

Fast changing?

I was recently looking at some documents I had created a few years ago.  My first thought on reading them was that they were out-of-date, but on re-reading them, I realised the format and appearance was out-of-date but almost all the content was still relevant.

Sometimes we get confused by, or seduced by, the medium and forget to concentrate on the essential message.  Being up-to-date and looking modern and professional is important - but of no use if the underlying message is not right.

Oddly enough, things rarely change as fast as they are often though to - or claimed to.  Even in the IT  world, most of the 'principles' of computing have not changed in 20 years.  The hardware and software changes but fundamentally, computing is much as it was in the early days of the PC when it moved from the computing department to the individual.

So, review and update - but also reflect on the past and learn the lessons. Change - but because you have assessed the situation and the environment and have determined an appropriate course of action - not because change looks 'attractive'.

Its not that easy

I'm sure that even if you haven't read Thomas Piketty's book, Capital in the Twenty First Century, you will have seen the controversy surrounding his suggestion that we need to substantially raise taxation of the wealthy to force a 'better' redistribution of wealth (or more properly, of capital).

Picketty takes special aim at those with capital who don't have to work for it.

Whatever your views (and this is something about which people feel strongly rather than reason logically), Thomas Picketty has forced a debate on the world and that can only be good.  Those who believe in the free market have to defend the 'status quo'; those (like Picketty) who want to see change have to justify the actions they want to take,

The rest of us can sit on the sidelines, observe and listen.  But this is an important issue.  I urge you to read the book - just so you can take a more informed position in the debate; I also urge you to read the criticisms of Piketty's viewpoint and seek the 'balance' that might steer us through this debate.

We (almost) all want 'a fairer world'.  The question is ...Does Piketty have an approach that might takes us towards one?

Productivity figures (continued)

I spoke last week about the problems of interpreting productivity figures.

Recent data from the Uk's Office for National Statistics suggests that across the economy, productivity is still 4.3% below the pre-crisis peak and if it had continued growing at the pre-crisis trend, it would be 20% higher than today.

This has some advantages.  Output is up slightly - and this means (because productivity is not rising) that unemployment is down. And the treasury benefits from increased tax revenues and lower benefits payments.

So far, so good.  The problem is that this does not make UK firms and products more competitive -  so any gains might be short-lived.

We should enjoy the 'feel-good' factor; the 'bump' might be nearer than we think.